Article

“Radical change” needed in major infrastructure decisions - IoD

07 Mar 2015

The UK needs a radical change in the way it judges whether major infrastructure projects are worth the money, argues the Institute of Directors in a new pre-election manifesto paper,GE2015: Key Priorities for Infrastructure.

The IoD is calling for the creation of independent Infrastructure Value Index, which would rank government projects on a range of criteria, from total cost and expected return, to environmental impact and speed of delivery. The Index would help bring rigour to the decision-making process and allow projects to be compared against each other using a standard set of metrics.

Launching the series of policy recommendations, Dan Lewis, Senior Infrastructure Adviser at the Institute of Directors, said:

“The rows over airport expansion, high-speed rail and fracking demonstrate that our current system for making decisions about major infrastructure is not fit for purpose. Transport, energy and communications are rightly an area where government prioritises spending, but while projects continue to be considered in isolation, the national vision we require to build and sustain a modern economy with 21st century infrastructure will remain elusive. We need a much more comprehensive, thorough, and empirical approach to making these decisions.

“A lack of robust and independent data often means it is companies and proposals with the most effective lobby that get the green light. This has a distorting impact and means funds are diverted to the biggest or fastest projects, at the expense of simpler and cheaper alternatives.

“There have long been calls to take politicians out of the decision-making process, and there are strong arguments in favour of creating an infrastructure commission. An independent Infrastructure Value Index would be a vital tool to hold such a commission to account. Putting rigour, not rhetoric, at the centre of the decision-making process will transform the way we approach major infrastructure decisions.”

The IoD are also calling for the next government to:

Publish an Annual Infrastructure Report, which audits all ongoing projects to measure their progress, encourage accountability from public bodies and continue to demonstrate that projects are delivering value for money.

Accelerate the planning process, by boosting the levels of direct compensation paid to local communities for disruption and land purchases.

Increase private sector ownership of appropriate assets, such as the railway infrastructure and network.

Support HS3 and the Northern Hub project which will benefit the north of England through metropolitan agglomeration.

In the paper, Lewis outlines five basic principles which should guide decisions on infrastructure and planning. These include rules for how finite resources should be divided between projects, and urges the private sector to fund initiatives wherever possible.

Lewis continued:

“The next five years will see the incoming government have to deal with some tough infrastructure decisions. As the amount of money available to invest comes under even closer scrutiny, they should use these basic, common-sense principles to ensure every project delivers for the country and has the highest chance of success.”

The full paper, GE2015: The IoD’s Priorities for Infrastructure can be downloaded HERE